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Silver prices jump above Rs 67,500/kg tracking firm gold and dollar downtick; speculators trim net long position

The spot gold/silver ratio currently stands at 71.20 to 1 indicating that silver has outperformed gold.

Mumbai / July 26, 2021 / 04:18 PM IST
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Silver prices rose above Rs 67,500 per kg on July 26 tracking gains in gold and weaker dollar. The precious metal had declined Rs 1,295 or 1.9 percent last week on the MCX.

The white metal extended gains to trade at day’s high after a flat to gap-up start in the afternoon session.

The semi-precious metal has been trading lower than 20, 50, and 100 days’ moving averages but higher than the 5 and 200-days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 42.89, which indicates weakness in the price.

The US FOMC meets on Wednesday and no change in policy is expected, Chairman Jerome Powell will likely be pressed to clarify what "substantial further progress" on employment would look like.

According to US CFTC data, silver speculators cut their net longs by 8,431 contracts to 26,247 in the week to July 20.

Close

Silver holdings in iShares ETF were unchanged at 17,275.76 tonnes. The fund NAV is trading at a premium of 0.07 percent.

The US dollar index modestly lower at 92.71, down 0.23 percent against the major cross.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver future has resumed on a positive note after rising 0.25% from previous week’s closing. The price has traded with sideways to marginal positive momentum, trailing over the support of 15-SMA of intraday chart placed near Rs 67,050. The silver price has impacted with a rise in the dollar also US yield moved higher.”

The spot gold/silver ratio currently stands at 71.20 to 1 indicating that silver has outperformed gold.

MCX Bulldesk increased 67 points, or 0.46 percent, to 14,590 at 15:12. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, silver for September delivery touched an intraday high of Rs 67,578 and a low of Rs 67,042 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 66,286 and a high of Rs 75,215.

Silver delivery for the September contract soared Rs 490, or 0.73 percent to Rs 67,514 per kg at 15:13 hours with a business turnover of 11,642 lots. The same for the December contract gained Rs 465, or 0.68 percent, to Rs 68,640 per kg with a turnover of 1,073 lots.

The value of September and December’s contracts traded so far is Rs 824.83 crore and Rs 27.13 crore, respectively.

Similarly, the Silver Mini contract for August edged higher Rs 411, or 0.61 percent at Rs 67,680 on a business turnover of 20,652 lots.

Geojit Financial Services said, “If the support of $24.20 remains undisturbed, expect recovery upticks in the counter. A direct drop below the same is a signal of long liquidation pressure. MCX Silver Mini August has resistance at Rs 68,800 and support at Rs 66,400.”

At 0948 (GMT), the precious metal rose 0.95 percent and was quoting at $25.47 an ounce in New York.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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